The Checkout

Do You Need ID Theft Insurance?

It's not surprising that the increase in identity theft has also given a boost to identity-theft insurance. After all, it can be very expensive and extremely time-consuming to restore your good name and credit once your personal information has been used by another person to commit fraud.

But is identity-theft insurance a good deal? The National Association of Insurance Commissioners raises some key questions you should ask--and, of course, answer--before signing up for a policy that typically costs between $25 and $50 a year.

The association of state insurance regulatory officials notes that ID theft insurance doesn't protect you from becoming a victim; nor does it cover direct monetary losses that are incurred. What it does cover is the costs of reclaiming your financial identity, such as the costs of making phone calls and copies of documents, mailing documents, time off work and attorney fees.

The association suggests some key issues to consider before signing up for ID theft insurance. First, check your current homeowner insurance policy; it may already include ID theft coverage. If not, you may be able to add it to your policy for a small fee.

Other questions:

* What are the policy's limits? Most limit coverage to between $10,000 to $15,000.

* Is there a deductible? Some policies require you pay your first $100 to $500 in costs.

* If the policy covers lost wages, are there restrictions? And what is required to trigger this coverage? If you use your vacation time, for example, that may not qualify as unpaid leave and lost wages.

* If the policy covers legal fees, find out if there are limits and if the legal work needs to be preapproved by the insurer.

Of course, for any insurance policy, do some comparison shopping (looking at the above coverage issues as well as price) before you sign.

By  |  February 16, 2006; 9:50 AM ET Consumer Tips
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"Do You Need ID Theft Insurance?"

Your answer to this question is a couple hundred words too long. The answer is, "no".

The only insurance you should ever buy is that which protects from a loss that would be financially crippling (e.g., fire insurance to protect against the loss of your home).

Everything else is a ripoff by definition -- if the insurance company offers it, they're making money, which means you're losing money.

Posted by: Burke | February 16, 2006 10:31 AM

a simple no, follow by a simple opinion is insufficent to convince anyone why they should or should not do something

Posted by: Anonymous | February 16, 2006 10:46 AM

Need it, no..., but funny thing, once I bought it from the 3 major credit bureaus, the id theft basically stopped.

If you buy it from a regular insurer, waste.
If you buy it from the credit bureaus, view it as protection money paid to the 3 bullies that along with instant credit and lazy banks created the problem.

Posted by: Frustratedidtheftvictim | February 16, 2006 10:53 AM

Identitity insurance is like whole life insurance. It's great, but only if you think you're going to die. And, I am not dumb enough to fall into that trap!

Posted by: G. Bush | February 16, 2006 1:33 PM

I guess I'm pretty dumb, but I don't get it. Why do I need to buy I.D. Threft insurance from my bank, credit card company, or one of those credit bureau's when it is THEY and THEIR careless handling of my personal information that led to the I.D. Theft in the first place? Why is Equifax, et al not responsible for people being denied credit or bond insurance when it is THEIR bad/incorrect information that is the cause of this? (A friend literally lost is well drilling business because these twits had him listed as dead!) Are we supposed to buy insurance for this, too?

In former times, these sort of scheme were known as "protection rackets" and the people doing them were imprisoned and called mobsters. I guess under the Bush Whitehouse mobsters and gangs and organized crime is okay because they are now called "businesses" these devils provide campaign funds for the GOP.

Posted by: Mike | February 16, 2006 1:55 PM

Every product I see out there is reactive and doesn't actually prevent ID theft from happening. Why would I buy credit monitoring when all it does is tell me when I've been a victim?
The solution out there that I have seen is from LifeLock who is proactive and places fraud alerts with the bureaus. Plus they have a $1 million guarantee.

Posted by: Monica | February 16, 2006 5:06 PM

Need it? maybe not but it sure gives me peace of mind to know that I have an ID Theft Shield that not only protects me against ID Theft(giving me and my husband copies of our credit reports every three months, 24/7/365 monitoring and much more) BUT if it does happen they will restore my identity without me doing all the work. And the best part is that it only costs $12.95 a month to cover both of us.

Posted by: Susan | February 16, 2006 5:11 PM

Well, if you're happy paying $12.95/month for that, I have some even better insurance I can sell you for just $10/month that will keep your kitchen completely and absolutely aardvark free. Imagine how costly an untimely aardvark infestation could be -- scratched floors, dented cabinets, expensive Merlot guzzled in a heartbeat -- and yet I can offer you peace of mind for the low, low price of just $10/month.

Posted by: Burke | February 16, 2006 6:19 PM

Regardless of what you think of id theft insurance,
it's pretty obvious from a quick google that is an MLM scheme.

Posted by: Burke | February 16, 2006 6:37 PM

Burke is right, talk to one of those prepaid legal people and you will think you they are selling soap.

Posted by: Steve | February 16, 2006 6:47 PM

I don't know if soap could clean up the bullshit that Burke and Steve have been feeding you but they have obviously NO clue what the hell they are talking about. So Burke and Steve step aside and let the grown folks talk...the FBI says identity theft is "the fastest growing crime in America," the Federal Trade Commission says that 1 in every 4 Americans will fall victim in the next 12 months and over 10 million innocent people fell victim last year alone. You cannot deny facts and thats exactly what we have here...the research documentation beats conversation all day long!!! It's not a matter if it's going to happen it's when it's going to happen!! And as far as Prepaid legal being a MLM scheme, Burke you should really do some research before letting the world know how uneducated you are about the subject. MLM schemes are NOT on the NYSE (PPD) nor have they been around since 1972!!! If you would like some information to better educate yourself about ID theft or Prepaid legal please feel free to email me or visit For those who don't see why or understand why the should find some kind of protection against Id theft I encourge you all to educate yourself on the problem before you make your decision.

Posted by: Leslie | February 16, 2006 9:06 PM

I couldn't agree with Leslie more, but might add that you can't educate the ignorant.
For the last three years I have been assisting people with their Identity Theft problems.
There are three major things that victims encounter:
1. The time it takes to correct ID theft issues = 600 hrs or more that is fifteen forty hour weeks.
2. Most People do not know the steps it takes to get their lives and good names back.
3. In every situation the victim has needed the assistance of an Attorney and Investigator.
Steve and Burke have not gone through it yet and I don’t want to inflame them, that does not solve anything, but Steve, Burke, take a powder for a minute, open the closed mind and go out and ask 10 victims of this crime what they have done to resolve their issue’s, I’ll bet most have no idea where to turn, without getting any good advise, just because of confusing messages based on a half hearted effort from someone who hasn’t done their homework.
Pre Paid Legal Services Inc, is a New York Stock Exchange traded company listed under the symbol of PPD. They provide the best legal service plan in America today with a collection of top rated law firms nation wide to provide service for an entire family at one price. And since it is also real difficult to have an illegal legal service and for this company to have been in business for 34 years now, I see your information is flawed a little and you really need to go back to school.
Kroll Background America, a NASDAQ traded company under the symbol KROL, which is the other partner in the Identity Theft Shield service, is well known world wide and does not do business with schemes or scams.
What I have not seen here is the comparison of companies that only provide insurance and companies that actually take care of the problem with full restoration. Pre Paid Legal and Kroll do not just monitor they do full restoration, they provide a service that may be used for more then just Identity Theft issues.
I have been helping on average of 15 people a week with Identity Theft issues and my own Uncle had his identity stolen 19 days after he passed away. My Aunt is fortunate that they had Identity Theft Shield. So you might have guessed by know that I am too an independent associate with Pre Paid Legal and proud to be after 5 years of service. People need to wake up and realize this is a real problem and this company has a real solution, unless Steve and Burke want to march into their doctors office to have the chip implanted in their forehead or right hand, spooky thought, maybe, don’t put it past the powers that be. But of course if you are not the type that is proactive in your life then maybe you just get what you deserve, for me, it just doesn’t pay to mess around.

Posted by: Cal | February 17, 2006 2:35 AM

I thought I would never see Alan Greenspan fromer and present Federal Reserve Chairman Ben Bernanke's name in the same news article with Pre Paid Legal Services, but here it is for those who need the clue train.

Read and Enjoy it is current and one of thousands on notable articles by professionals that do their homework when looking at a company for what it is. Thanks and may your Identity be safe tonight.

Posted by: Cal | February 17, 2006 3:02 AM

After 32 yrs in the financial services business, I have come to learn that there is never one right answer to any problem. If ID Theft protection brings you peace of mind from the bad guys, then by all means buy it. If you are a high risk taker & believe that insurance is a waste of money, then that is OK also. What concerns me is when those who don't attempt to protect themselves, expect the rest of us to bail them out when something bad happens. Our society simply can no longer afford to make others whole for losses that they chose not to protect. By the way, as consumers,we all pay for the ID Theft losses in the increased cost of the goods & services provided in our economy. Lobby your legislators for more severe laws imposing penalties & jail time for offenders & for states to pass laws like CA that allow us to invoke a credit freeze when ID Theft occurs. Finally, let's be civil about these discussions & debates.

Posted by: Rick | February 17, 2006 9:07 AM

Think you're not at risk for identity theft? Think again: Your information is ALREADY out there!!!

Every school you’ve every visited, every employer you’ve ever had, every doctors office and hospital you’ve ever visited, every county you’ve ever received a traffic ticket from, every company you’ve ever dealt with, they all have YOUR information!!

Our own government sells our personal information to various private web sites we all have access to for a small fee.

Credit fraud makes up just 28% of all identity theft. So what about the other 72% of identity theft?

Consider the five types of identity theft:

1. Department of Motor Vehicles (driver’s license)
2. Medical information (Would you mind if someone had an aids test done in your name?)
3. Character or criminal identity (Would you mind if someone robs a bank and claims to be you?)
4. Social Security number
5. Credit identity

How would you feel if your house was on fire and the fire department came by and gave you a 6” manual telling you how to get rid of the fire?
Wouldn’t you rather have the fire department turn out the fire FOR you?

Posted by: Alexandra | February 17, 2006 10:00 AM

Prepaid Legal is MLM. You can make your own judgements about MLM, but most people consider it a scam .

And the fact that the PPLers feel a need to spam their personal URLs all over the place certainly doesn't detract from its scamminess -- why don't you guys just post the main URL -- oh, that's right, you wouldn't get your kickback that way.

The point and bottom line is that the average person will spend a heck of a lot more in monthly payments to PPL than they ever would in costs to repair damage from ID theft.

Posted by: Burke | February 17, 2006 10:57 AM

Burke, lets put this to rest. Who do you get your Health Insurance from; someone that provides employee benefits, right or right. Well PPL does the same, it provides legal service as an employee benefit as well! We are not here to argue with you, but the attack on MLM companies is a lot like the attack on certain Auto companies in this country and I don't know if you have looked lately but those companies lead the industry today, what does this have to do with Identity Theft and PPL. Business is Business it's all depends on your timing in that business that makes the difference and I'm sure your company would be proud to have as much good press on it as Pre Paid Legal does. Companies that are scams don't last for more then 5 years anyway, so where are you going to throw mud now. You need to slow down and get informed. I have not spent more then I have saved in PPL and never will, you can't judge a service you don't have. All this does not solve or add anything to the Identity Theft issue. Most people will find the Identity Theft issue has a lot more then just credit cards, but here is a scenario
you may want to ponder.
Example;If you have a credit card taken out in your name but a different address and you don't find out about it for lets say fourteen months and it is run up to let say $10,000, who pays the bill? Well after reviewing the well stated insurance on credit cards, if you catch the error in less than 60 days you may only be liable for $50, but the fourteen month senario you are liable for the entire amount. Don't believe me, get involved and see. I have seen business owners ruined from Identity Theft, it's all a balance of what you believe.

Posted by: Cal | February 17, 2006 11:56 AM

Cal, your ID theft scenario is simply wrong. You are not liable for any charges on a credit card that you didn't open.

The $50 limit and any time limits are applicable to a stolen or lost credit card; not to someone else opening credit lines in your name.

Posted by: Burke | February 17, 2006 12:19 PM

Burke, you may be right, but who opened the line of credit to begin with? The good you or the bad you? The you in California or the you in Washington DC?
That is what Identity Theft is all about and it is up to YOU to prove that you are innocent when really you are guilty until proven other wise,according to the system, with I might add no money to pull from because the bad you has just spent it for you.
So you didn't like that scenario well here is one that is more to your liking.
Example; You are told by the bank that your three year old son can not open a savings account in his name because he is wanted in seven states for passing bad checks. And on the way home you are pulled over by the police and arrested because you didn't show up for your DUI trial and while you sit in jail someone else assumed your name and sold your house.
Pretty rare, yep but all three situations have happen in the last year. So if you don't monitor and have full restoration, you may find yourself in the same spot.
I know business owners that have had to close their business because you were wrong about the first scenario. Read the fine print or in my case, I have the Law Firm read it for me and find all the hidden gotchas.

Posted by: Cal | February 17, 2006 1:13 PM

I have to agree with the ladies on this one. All you dumbasses living in the old times don't realize what we can do with the technology we have. And its people like you who make this crime so bad because you don't want to believe in it. ID thieves thrive on people like you.WELL GUESS WHAT ITS A 5 BILLION DOLLAR CRIME INDUSTRY!!!! OPEN YOUR EYES FOR ONCE! I market for prepaid legal, i know what my service is and i will laugh at all of you close-minded people when you go to put your kid in college and you cant get a loan because you were stupid enough to never check your credit, you use your soc. security # everywhere, and now someone owns three houses, two cars, and has killed someone under your name. Oh yeah, thats criminal id theft you morans probably have no clue what that is and thats why you should have your id stolen just so you realize how bad this crime is, but don't worry if you wait long enough, IT WILL HAPPEN EVENTUALLY! So do what all you smart people think will stop it, shred your mail, and use secure internet sites EVEN THOUGH IT DOESN'T MATTER! The average person is on 50 databases across the world and guess what in 6 months this year 5 databases were cracked for over 50 MILLION pieces of personal information. Sit back relax and wait for a financil nightmare... I can't believe some people think its no big deal. They will when it takes 3 years and 10,000 to fix it... fools thats all you people are.

Posted by: Mike D` | February 17, 2006 1:34 PM

You get paid to write what?

Posted by: Wow | February 19, 2006 11:02 AM

Ten thousand dollars is an insignificant amount. I'm currently waiting for my US$13M (THIRTEEN MILLION) to be transferred to my bank account from Dr. Clement Okon in Nigeria. It's a sweet deal baby. I'm set for life!

Posted by: Anonymous | February 22, 2006 1:19 PM

No, he does not get paid to write that. Prepaid Legal Services, Inc is a great company

Posted by: Wes | March 9, 2006 3:44 PM

Get over it... ID theft is the number one crime in America, and according to the "neutral" government agency, Federal Trade Commission, by 2008 1 in 3 Americans will have been a victim of ID Theft at some point in their lives.

I was in, in 1995, when it was still pretty much a rare "closet" crime, that financial institutions hid, fearing loss of faith from their customers.

(My identity was stolen by a nurse in a hospital I stayed at - you can trust NO one).

It cost me a considerable amount of personal time, stress and anguish to get it straightend out... almost 6 months.

Plus, with collectors threatening and my credit screwed during that time, it was NOT a pleasant situation. If I'd had someone trained, proficient and able to drive the restoration process for me, it would have been worth WAY more to me than what most of these little insurance plans cost!

Those who think every offering is a scam need to just go dig themselves a hole and crawl into it. It's the only way they'll be able to avoid the crap the rest of us have to face... including ID theft.

Posted by: Mikey | April 26, 2006 3:11 PM

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